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7 Tips To Tackle Financial Challenges As A Family

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7 Tips To Tackle Financial Challenges As A Family

Everyone dreams of having a financially healthy family. But at times, we face financial challenges that can blow our savings and become obstacles to our goals. These financial challenges eventually become a source of stress.

Well, you can’t be totally immune to financial challenges in your life. But you can try to plan your finances to stay away from them. If you are already facing financial difficulties, you should know how to tackle them instead of worrying about them.

Here are some of the best possible tips to tackle financial challenges as a family and ease your stress.

Happy family sitting in a park

Prepare For The Rainy Days

A recent CNBC report shows that only about 39% of Americans can afford a $1,000 emergency expense. This means 61% of Americans don’t have enough money in their emergency savings.
Most of them become vulnerable to debt traps when they need money during emergencies. They may opt for fast cash options such as payday loans or credit card cash advance. So, you need to prepare for the rainy days. Life is uncertain, and anything can happen at any moment.

Start a commitment to savings every month for your emergency fund. Financial experts say that an emergency fund should make up your expenses of about 5 to 6 months. By doing so, you can prepare yourself to face any emergency expenses without relying on loans. Being financially prepared can help you take on emergencies in a better way!

Live Within Your Means

Does your monthly spending exceed your income? If so, start tracking your income and spending habits. The simple solution is to plan a budget and stick to it. You can check out these budgeting techniques and design a suitable budget.

Make sure your budget focuses on the necessities in your life. Some of your discretionary expenses may seem like necessary ones. But it would help if you sort them out to save money.

One of the easiest ways to live within your means is to stop using credit cards. Credit cards can provide you with a false sense of financial security. With credit cards, you might end up buying more than what you can afford. According to a Forbes article, people tend to spend more with credit cards than with cash.

So, the next time you go shopping, try to use cash instead of credit cards. It can help you avoid impulse buying and save a good amount.

Are You Thinking Of Expanding Your Family? Plan First!

A new baby brings enormous joy to a family. But new parents face financial challenges once the little one comes into their lives. So, preparing for a baby needs mental planning and financial planning too.

First, estimate the insurance costs. Talk to your HR department (if you have an employer-sponsored health insurance plan) or health insurance provider about the prenatal and delivery care out-of-pocket expenses.

Also, draft your pre-baby budget by keeping the upcoming expenses in mind. You need to take post-delivery costs like diapers, child care, baby food, etc., into account.

Most importantly, check your and your partner’s maternity and paternity leave benefits. Based on that, plan your finances while you or your partner is off work. That’s why financial planning is essential before getting a baby. Unexpected expenses and rising daycare costs can burn a hole in your pocket.

Does Your Rent Keep On Increasing? Buy A Home

Couple hanging a sign that says "Home sweet home"

One of the major decisions in our lives is whether to buy or rent a home. Well, buying a home can help you build equity and get tax deductions.

But renting has its advantages too. It offers you flexibility and no responsibility for home maintenance. So, many people think that renting is a better option than buying a house. But the average rent increase ranges from about 3% to 5% a year. So, you may have to shell out more if your landlord increases the rent.

However, buying a house can help you build wealth. You will have to manage property taxes, maintenance costs, repairs, insurances, etc. But the value of your home is likely going to appreciate with time. If you get a fixed-rate mortgage, your monthly payments will stay the same. And you can plan your budget accordingly. Mortgage rates are pretty low till now. If you have a good credit score, you can get a 30-year fixed-rate mortgage at about a 3.180% interest rate.

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Stuck In Debt? Opt For Professional Help

A March 2021 report by MarketWatch shows that almost 56% of Americans live paycheck to paycheck. One of the reasons behind this is owing debts, especially unsecured debts.
Unsecured debts like credit cards have high interest rates since they don’t require collateral. So, if you are stuck in multiple debts, you might be wasting a significant amount every month on interest.

But no need to worry. You can consult a debt relief company to get out of this mess. The debt consultants will suggest the best debt relief option based on your financial situation.
They can help you save money on interest payments and repay debts faster. Working together, they will guide you through your debt repayment journey.

Stay Optimistic

Yes, keeping your mindset positive can help you to tackle financial challenges in a better way. If you think that you won’t overcome these challenges, your morale will be down. And this journey will seem like a tough one.

So, stay optimistic and keep yourself motivated to overcome your financial challenges.

Conclusion

Tackling financial challenges as a family is not tough at all. You need to follow some tips like we discussed above and apply them to your life. Don’t let these challenges limit you from accomplishing your financial goals.
Remember, you are the role model for your child. He or she will learn from you how to handle finances and follow in your footsteps. So, make sure that you are making wise financial decisions and imparting good money habits.

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About The Author
Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She has started her financial journey long back. Good Nelly has been associated with Debt Consolidation Care for a long time. Through her writings, she has helped people overcome their debt problems and has solved personal finance-related queries. She has also written for some other websites and blogs.
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Featured Image: Family hugging by senivpetro on Freepik.com. Post images supplied by the author
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